How to Make the Most of Social Security

When to take benefits, when to delay.

Scott Holsopple

It’s time to review how to maximize your Social Security payout. Recently I was talking with a friend who was helping her Baby Boomer mother work through her retirement planning. Her mother, just a few months away from retiring after more than 45 years of work, didn’t realize she could delay receiving Social Security benefits to increase her payout. She also didn’t know she could keep working while receiving benefits.

There are things you can do to affect how much you’ll get in Social Security payouts. That is why you need to incorporate Social Security when you take control of your retirement planning.

According to current law, you can begin taking benefits any time after age 62, but your full retirement age – or normal retirement age – varies depending upon your birthdate. For example, if you were born after 1960, normal retirement age is 67. Born before 1938? It’s still 65.

The SSA has a formula for figuring each person’s monthly benefit. Here’s what you need to know: the number of years you work, your average salary, and the age you start taking benefits will factor largely in deciding your monthly benefit. About your overall lifetime benefit, the SSA website says:

"As a general rule, early or late retirement will give you about the same total Social Security benefits over your lifetime. If you retire early, the monthly benefit amounts will be smaller to take into account the longer period you will receive them. If you retire late, you will get benefits for a shorter period of time but the monthly amounts will be larger to make up for the months when you did not receive anything."

If you delay benefits past your full retirement age, you may be eligible to receive an increase in your payment amount. Keep in mind, your benefit increase stops after you reach age 70, meaning there is no good reason to postpone your payments past age 70.


Every good retirement plan starts with a goal – how much money will you need during retirement? What monthly income will you need to live the retirement lifestyle you’ve imagined?

Your 401(k) savings will, hopefully, provide the majority of your monthly income, so you’ll need to spend most of your planning time figuring out how you can maximize your 401(k) saving and investing strategy. Then play with the Social Security numbers a little.

Use the SSA estimator to approximate what your monthly Social Security benefit could be. If you want to be able to input more specifics for a better estimate, there’s a detailed calculator you can download.

If your full retirement picture points to a need for just a little more money, consider manipulating your anticipated Social Security benefit by altering the age you stop working or the age you take Social Security payments. Remember, your benefit amount is based largely on an average of your working-years salaries. If you’re due a big raise, consider working a couple more years and delaying payments to increase your salary average – delaying retirement also allows you to save more in your 401(k) and delay taking withdrawals from your 401(k).

If you or someone you love is nearing retirement, you can apply online to receive Social Security benefits.

Don’t wait until you’re ready to retire to examine Social Security. Regardless of your age – even if you’re just starting your career – you can develop a retirement saving and investing strategy that takes Social Security into consideration.

Scott Holsopple is the president and CEO of Smart401k, offering easy-to-use, cost-effective 401(k) advice and solutions for the everyday investor. His advice has been featured on various news outlets, including FOX Business, USA Today and The Wall Street Journal.